Gold Market Wire
News, analysis and commentary for gold traders and investors
Silver Market Update
Is Silver Set to Try Again?
June 11, 2021 - (Gold Market Wire) - Silver is putting in some developments that, at first glance, look positive. Of course, we've been down this road before, and have sold off to go back down, but this morning's gap shows some potential light at the proverbial end of the 'tunnel'. That 'tunnel' is more properly called the box we've been caught in between $27.45 and $28.13 for the past 17 sessions. Assuming an outlook that says we can't stay here forever(!), we are starting to favor that the upside breakout will occur before another real leg down, i.e., one with a few daily closes (perhaps a weekly) below $27.45, does. Today's developing gap and the channel are starting to hint at higher prices.
Yes, we still have the horizontal to clear, and the downtrend (marked out below), but, equally, as we start developing our (narrow) channel, we can start to see how forces are converging to take us higher. The convergence of the downtrend and the horizontal resistance make clearing this area critical. We can see how we could get a spate of following buying action should we start to move above the markers. In retrospect, we are starting to see the past 17 sessions in the "Box" as an energy/momentum building exercise. The fact that it has taken so long, for us at GMW, only encourages us even more. Consolidation is the best antecedent to a sustained movement higher. Sustainable rallies like to back off, consolidate, re-group and work higher. That's pretty much what we've been doing.
This market has tried to get below $27.45 for some time now, without only one case of success (June 3rd), and that was by only 1 cent - after which it was quickly recovered. That doesn't 'count', from our perspective. Moreover, that June 3 attempt to break the pattern of "higher lows" is now starting to look like downside failure in our book. Now, its time to try the upside. We've been knocking on the door for some time. The uptrend from March 31 has not been reversed.
To us that means its time to move higher. The Channel, the Gap and the trend line are all pointing that way. We have only the last two convergent hurdles, horizontal and downtrend to clear. It looks like we are getting ready to do just that.